The Karnataka High Court on Friday directed the Managing Director of Canara Bank to personally appear before it as the bank had changed its earlier stand of merging with the loss-making Amanath Co-operative Bank Ltd.(ACB).
The direction was issued after the counsel submitted that Canara Bank has decided against going ahead with the merger agreement as the financial erosion was higher than anticipated earlier.
Justice Ram Mohan Reddy issued the direction while hearing the pleas for and against the merger of ACB with Canara Bank, as well as pleas for a probe by the Central Bureau of Investigation (CBI) into the affairs of the ACB.
As per earlier audit, the customers of ACB, with deposit of more than Rs. 1 lakh, would have to suffer a loss of 18 per cent of their deposit if the merger was to be financially viable, but further scrutiny of ACB records has indicated that its depositors would have to incur a loss of 32 per cent, the counsel said, pointing out that this situation makes the merger unviable. However, Justice Reddy criticised Canara Bank for not bringing this aspect to the court’s notice earlier, though liberty was given to it to approach the court in case of any difficulty, when the court on July 31, set a deadline for the bank to take over the specified assets and liabilities of the ACB as per the proposal approved by the Ministry of Finance and the Reserve Bank of India. Pointing out that it was Canara Bank which came forward to take over the ACB, the court said that interests of both the banks and their customers are to be protected.
Advocate assaulted
A woman advocate representing Amanath bank was assaulted allegedly by employees of the bank on the High Court of Karnataka premises on Friday.
Mubarak Begum, who represents Amanath bank in the case regarding the merger, told The Hindu that she was assaulted around 4.30 p.m. when she came out of court hall 8 after making submissions.
